AM Comments February 20 2025
Good morning. Back-and-forth we go at the board of trade, with corn and beans to start Thursday trading as much higher as they were lower on Wednesday, while the wheat market is chopping around unchanged. A lower dollar index is helping the upward momentum this morning, but otherwise traders continue to juggle the same general themes of production in South America, trade policy in the US, and peace talks in Russia/Ukraine; add in the February crop insurance pricing window and the quickly approaching US spring planting season, and it quickly becomes difficult to assess which headline will be the most important on any given day. That being said, and as we have mentioned many times since Trump took office, volatility likely remains elevated into the US spring seeding season; don't be lulled to sleep by the slower news cycle of late, and especially if you're a producer, have a plan in place for sudden price moves and be aware that the typing of a tweet could vastly change market sentiment from one day to the next. Corn futures to start Thursday trade are 2-3 cents higher, soybean futures are 4-6 cents higher, and the Chicago wheat market is trading either side of unchanged. Products are mixed, soybean meal is down around 50 cents/ton, and soybean oil is up 40-50 points. Outside markets are mixed, crude oil futures are up 20-30 cents/bbl, the Dow Jones index is down 140 points, and the US$ index is down 30 points. The S&P500 is down 20 points and the NASDAQ is down 50 points. Gold futures are up $20+/oz and have made new contract highs again overnight.
Today's Reports: Weekly Jobless Claims; EIA Weekly Ethanol Production/Energy Stocks
- This morning's weekly ethanol production report for the week ending February 4th, delayed a day this week for Monday's holiday, is expected to show daily production in the week between 1.052-1.077 mil bbls, while stocks for the week are seen between 25.392-26.000 mil bbls. On average, the stocks figure would be similar to last week, while production would be down about 2%. The report will be out at 11am central time.
- The USDA will release its latest cattle on feed report at 2pm central time tomorrow afternoon; the report is expected to show the US feedlot herd as of February 1 at 11.703 mil head, or 99% of a year ago. Placements in January are estimated at 1.830 mil head or 102% of last year, while marketings in the month are estimated at 1.882 mil head, or 102% of last year also.
- Peace talks in Ukraine are off to an expectedly bumpy start, with both President Trump and Vice President Vance on Wednesday taking shots at the besieged European country; Trump called Ukrainian President Zelensky a dictator who wasn't elected, adding that if he doesn't act quickly he will not have a country left to defend. Vance, in response to comments Zelensky made about Trump, told the Ukrainian president to stop "badmouthing" Trump, adding that this was an "atrocious" way to deal with the new administration.
- Brazilian ag firm Agroconsult, who hosts the popular Rally da Safra crop tour in Brazil, said that results of the tour showed soybean crop potential of 171.3 mmt's in the country, which was actually down slightly from their previous estimate but still above both the USDA and Conab, and also a new all time record. The group estimates yields at 60.0 sacs/hectare, which would be up more than 8% from last year and would also be a new record. Of note, the tour covers an area that represents about 95% of Brazilian soybean production.
- The French Ag Ministry earlier this week said that farmers in the country planted 6.35 mil hectares of winter grains in the 2025 season, which is up about 7% from last year but still around 1% below the five-year average. They added that continued wet soil conditions could possibly affect future yields, and also potentially lead to replanting in the spring.
- Along with comments regarding the war, Trump on Wednesday also mentioned a possible new trade dela with China, adding that relations were "great" between him and President Xi. The US President also mentioned as it pertains to DOGE, using 20% of the savings to pay down national debt and also using another 20% to give back to the American people; this is seemingly similar to the $5,000 tax refund Elon Musk had touted earlier this week.
- Rainfall in Argentina on Wednesday was limited to areas south of the country's main growing regions, while areas in the far north near Paraguay also picked up rains; otherwise, the rest of the country was largely dry according to satellite. In Brazil, the eastern half of the growing area continues to stay largely dry, while just light/spotty showers were noted through the south and south-central regions. The heaviest rains in the area were off the coast in the open Atlantic.
- Not a lot of forecast change again overnight, with the bulk of Argentina expected to be dry while better rain chances return to southern growing areas over the weekend and into next week; forecasts into the first week of March continue to show rainfall chances for nearly all of the country, with the Ag Belt expected to receive upwards of 2-3" with some locally heavier amounts. Brazil looks to stay wettest in the west over the next 10-15 days, but the majority of the growing areas, especially those to the east, continue to see just limited rain potential.
- Short-term, the US forecast also doesn't have a lot of note; temperatures will continue increasing into the weekend, with highs expected to be back above average for most all of the country by Monday, while precip stays confined mostly to the PNW. Into next week, light precip is expected for the upper Midwest Tuesday/Tuesday night, with a larger system expected to work through the Midwest Thursday into Friday.
- Beyond next week, the week two forecasts generally trended warmer and wetter overnight; starting on the precip side, the EU AI output continues to be the wettest of the bunch for the eastern US, while the EU and GFS ensembles see generally above average precip chances in the northeast, while also now seeing above average precip through the upper Midwest as well. On temps, all three model outputs now show cool air staying confined north of the Canadian border in the 5-10 day period, while even in the 10-15 day period, cooler air is limited mostly to the Great Lakes area and states in the upper northeast.